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Medical graduates

Medical graduates: Should I repay my HECS/HELP debt with extra savings?

Simon Curtain
Partner/Private Client Adviser
16 Mar 2016

The cost of obtaining a medical qualification, either under or post graduate at an Australian university can leave graduates in hundreds of thousands of dollars of debt. Therefore it’s no surprise that one of the most common queries we receive from young medical professionals is whether or not they should repay their HECS / HELP debt early when they start making a good income.


A Higher Education Contributions Scheme (HECS) or HELP (Higher Education Loan Program), debt is incurred when the Federal Government lends you money to fund your university education which you do not need to repay until you earn over a certain threshold.

The beauty of this is that the loan is interest free. Therefore the short answer is no, there’s no rush to repay your debt.

HECS-HELP debts are adjusted each year with inflation. This ensures the real value of the loan remains the same over time. Given the loan is interest free, if you’re able to accumulate some extra savings during your intern or resident years, it can make more financial sense to put it towards other things. This could include reducing other debt you may have incurred while studying such as credit card or personal loan debt, both of which would carry interest. Alternatively, if you’re in the fortunate position where you have no debt, we recommend that you begin accumulating wealth.

The HECS-HELP loan will repay itself once you commence your internship and earn more than $54,000 per annum. At this time four per cent of your income will go toward payment of the loan. This percentage will gradually increase to eight per cent once you start earning more $100,000 per annum.

So as a graduate of medicine, while your HECS-HELP debt will likely be significant, there is no real incentive to pay off the debt early, particularly now with the voluntary payment bonus to be removed from 1 January 2017.

Put paying off you HECS-HELP debt on the back-burner and let it sort itself out over time.

Hewison Private Wealth provides wealth management services to many medical practitioners. If you would like further information, please contact us on (03) 9682 1900.

The information provided above is general information only and individuals should seek specialised advice from a qualified financial adviser.


Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.